GrabTaxi invests US$100m in Singapore to monetise its platform
N2N Connect takes on Bloomberg in terminal business in Asia
R&D (research and development) is the key phrase for me this week. And unlike innovation and creativity, which every company likes to throw at you, few actually talk about R&D.
And that is because it is bloody hard – not just in actually doing R&D, but also in monetising it later.
Those of you who have been following the journey of Dr Gabriel Walter – a Digital News Asia Digerati50 – and his company Quantum Electro Opto Systems (QEOS) will know what I mean. Even with over 100 patents, he is still scrambling to find the right business model for the company!
Which brings me nicely to Anthony Tan and GrabTaxi (known as MyTeksi in Malaysia). You would think that a company that just raised US$250 million in December 2014 would have its business model locked in and sealed, right?
Think again. Read what one of his key investors, Chua Kee Lock, chief executive officer of Temasek owned Vertex Venture Holdings Ltd, says about GrabTaxi’s business model. Basically, while it has a good idea what it should be, it is still trying to figure it out.
But that was in late January.
I think they are focused on being a platform play, and will then look to monetising that platform. Every platform play that has been successful has been valued in the billions – mainly the US-based companies such as Facebook, Twitter, LinkedIn, and WhatsApp. Even Google’s search engine is a platform.
And on April 8, GrabTaxi took a big step towards figuring out how to monetise its platform with the launch of its R&D centre in Singapore. With an expected investment of US$100 million over the next two to three years, it will be focused on data analysis, trend-spotting, and product development.
At least that answers a big question mark I have about GrabTaxi because there is no way it can make anywhere near enough money from its current transaction-based business model to justify the huge investment from Softbank.
To me, it was a jaw-dropping amount for an investment in a consumer-focused startup, especially one that is focused on targeting the South-East Asian market. No startup in this region has even come close to getting this sort of investment.
And while I initially wondered why GrabTaxi did not consider establishing the R&D centre in Kuala Lumpur, the availability of the right talent pool in the areas it is looking at, and the fact that the Singapore Government would have given it a really sweet incentive package, would have made it an easy decision for founder and chief executive officer Tan.
Yet Khoo Chen Shiang, founder of SecQ.me which developed the Watch Over Me app, who is now back in the corporate world as head of digital for AXA Life, is puzzled by the move as he tells me that most Singapore founders he speaks to complain about the scarcity of talent.
“The cost of talent is just so much higher as well,” he says, pointing out how he overcame the shortage of engineering talent in his startup by hiring talent from overseas. He concedes, however, that it is easier to bring talent into Singapore.
In the United States, startups probably use the term ‘product development’ rather than R&D. I guess R&D is still a sexy term in Asia because that is how Andrew Tiang, founder and managing director of Bursa Malaysia-listed N2N Connect, prefers to describe his 100-strong product development team.
While GrabTaxi is focused on the consumer market in South-East Asia, Tiang provides trading platforms to stock exchanges and brokerage houses across Asia. It is a B2B (business-to-business) model.
What’s interesting about his story is that he plans to take on Bloomberg in Asia and provide his own terminals to the financial industry in Asia.
Like GrabTaxi, N2N too has a strong Japanese link – with media powerhouse Nikkei and financial data provider Quick Corp, which invested RM109 million into N2N in May 2014.
And speaking of Bloomberg, DNA will be occasionally appearing on Bloombergtv.my to share our thoughts about what’s happening in the tech sector in Malaysia. You can catch the first segment we did this week.
Singapore telcos: Winners and losers in 2014
Malaysia’s GrabTaxi on why its R&D centre is in Singapore
Bread & Kaya: How the ‘new’ Sedition Act affects netizens
Chinese fingerprint on smartphone trends in Malaysia, Singapore
N2N eyes Bloomberg’s terminal market
Globetronics in record US$12mil capex push
DNA Test: YotaPhone 2
Week in Review: Abuses of power, and leadership changes
Week in Review: Asean startups, Malaysian companies want you
Week in Review: Can Joel Neoh get his startup groove back?
Week in Review: Make innovation rock for you
Week in Review: Bridging ‘big tech’ and ‘little tech’
For more technology news and the latest updates, follow us on Twitter, LinkedIn or Like us on Facebook.